Xerox withdraws billion dollar offer for HP

HP headquarters

The hostile takeover of the computer manufacturer was canceled.

(Photo: AFP)

San Francisco The US printer manufacturer Xerox In the middle of the corona virus pandemic, the planned hostile takeover of the computer company HP stops. Xerox described Tuesday night’s move as disappointing, but necessary to focus on addressing the current crisis.

Xerox had $ 35 billion for the much larger one HP offered, which makes about six times as much annual turnover. The group should have largely financed the acquisition through new debt.

Not only the financial uncertainty caused by Corona seems to have made the deal impossible, but also the impact of the pandemic on the business of both companies: Xerox mainly sells large printers that are used in offices and are currently hardly used and least of all are bought. HP, on the other hand, benefits more from the trend towards home office.

The Silicon Valley pioneer makes two thirds of its sales with home computers, and its printers are also aimed at private individuals. In the crisis, Xerox’s business is under more pressure than HP’s.

The value of Xerox stock has halved in the past five weeks, while HP’s share certificates have fallen by around a quarter, about the same as the overall market.
Both papers suffered from the end of the takeover fantasy: Xerox shares fell by more than two percent in morning trading in New York, and HP shares fell by more than nine percent.

Icahn is already moving on

The streak puller behind the deal was the activist investor Carl Icahn, who at least temporarily held larger shares in both companies. Icahn already seems to have shifted his focus: In an interview with CNBC, the billionaire said recently that the shares of some corporations are now being “given away”. He had long considered the stock market overvalued, but now there are stocks of some solid companies to buy cheap.

The withdrawal is considered a victory for HP boss Enrique Lores, who had rejected the takeover offer published for the first time in November as too low. In February, Xerox increased its offer again, whereupon Lores showed unwillingness to talk.

Now the Spaniard, who has only been leading HP since November, is confident that HP can survive the crisis on his own: “We have a healthy cash position and a balance sheet that enables us to tackle unexpected challenges like a pandemic while at the same time being strategic To keep options open for the future. ”

HP has invested heavily in the development of industrial 3D printers in recent years. These were used in the times of Corona in the production of face or respiratory masks.

More: Follow the current developments in the corona crisis in our news blog.

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